PLANNING MODEL AND

LIBERALISATION

PRIVATISATION

GLOBALISATION MODEL INDIAPresented By: Pankaj Jain, Naketa Aggarwal, Jatin Gupta, Umesh Soni, Ravinder Sandhu FA-1 (2010-2012) IIPM, Chandigarh

LPGNew Economic Policy of 1991 / Economic Reforms of 1991

Post Independence 1950’s

1960’s – 1980’s 1990 onwards

Adopted Socialism

Government Sector

Increase in Exports

Agriculture

Business Regulation

Government Control

Green Revolution

Economic Reforms brought in by then P.M, Mr. P.V Narsimha Rao and then Finance Minister Mr. Manmohan Singh

1. LIBERALISATION INDUSTRIAL POLICY 1991

2. PRIVATISATION DISINVESTMENT (50%-51% Transfer)

3. GLOBALISATION INTERNATIONAL TRADE(Export & Import of goods)

INTERNATIONAL FINANCE(FDI’s , FII’s)

INTERNATIONAL MIGRATION(International students, Skilled workers etc.)

FDI’s & FII’sFDI - is Foreign Direct Investments i.e. a foreign company having a stake in a public sector undertaking in a country for a long period and that company is called Multinational Enterprise.

FII - is Foreign Institutional Investors, i.e, foreign Investment Bankers like Goldman sachs, Merrill lynch, Lehman bros etc...investing in indian markets......in other words buying indian stocks.....FII's generally buy in large volumes which has an impact on the stock markets...

Why FDI ?Gain a foothold in a new geographic market.

Increase a firm’s global competitiveness and positioning.

Fill gaps in a company’s product lines in a global industry.

Reduce costs in areas such as R&D, production, and distribution.

6

Types of FDI Entry

Prior Permission

(FIPB)Automatic

Route

New investment

Participation in an international

joint-venture

Purchase of existing assets

Why INDIA

Second largest group of software developers after the U.S.

lists 6,500 companies on the Bombay Stock Exchange (only the NYSE has more)

World's fourth largest economy & second largest pharmaceutical industry

Growth over the past few years averaging 8%

Liberal, largest democracy, Political Stability

Second largest emerging market (US$ 2.4 trillion)

Skilled and competitive labors force

Highest rates of return on investment

Abundance of natural resources

Has a middle class estimated at 300 million out of a total population of 1 billion

Destination for business process outsourcing, Knowledge processing etc.

Second largest English-speaking, scientific, technical and executive manpower

Low costs & Tax exemptions in SEZ

Tax incentives for IT , business process outsourcing and KPO companies

100 Fortune 500 companies have R & D facilities in India

I.T

Oil & Energy

Power sector

Pharmaceuticals & Chemicals

Atomic energy

Arms and ammunition

Lottery business

Betting and Gambling

Aircraft and warships

FDI Investment Sectors

Cigar and cigarettes of tobacco

Coal, Roads & Highways

Diamond, Gold, Silver , Minerals

Atomic minerals

Electricity

Hotel, hospitals

Real state

Mining

Mobile Sector

Automobile

Telecommunication

Major Investments

Companies Sector Investment

Wal mart,Marks Retail US$ 10 Billion

Intel Corp. I.T US$ 40 Billion

British & cairn Oil & Energy US$ 2 Billion

Essar power Power sector US$ 2 Billion

Toyota Automobile US$ 10.51 Billion

Panasonic Telecommunication US$ 200 million

Investments made by residents of a country in

financial assets and production processes of

another country

“An institution established outside India, which invests in securities traded on the markets in India”

Institutions like pension funds ,mutual funds, investment trusts, asset management companies, nominees companies and incorporated portfolio managers

Under securities such as shares, debentures and warrants issued by Indian companies which are listed /to be listed on the Stock exchange in India

The schemes floated by domestic mutual funds, traded on the primary and secondary

markets.

In government securities including treasury bills and debt securities of Indian companies.

Where they can…

ADVANTAGES OF FDI

Increase in Domestic Employment/Drop in unemployment

Investment in Needed Infrastructure.

Positive Influence on the Balance of Payments.

New Technology and “Know How” Transfer.

Increased Capital Investment.

Targeted Regional and Sectoral Development.

Increased Productive efficiency due to competition from multinational subsidiaries

Increase in Exports

Increase in savings and Investment

Faster growth of output and employment

Consumer Benefits

INTERNATIONAL MIGRATION

Lack of facilities

Reservation System

Cultural Experience

Superiority Complex

Value of the education higher abroad

Liberal Arts

Career opportunities

Why abroad?

IIT is one of the most respected institutions in the world for engineering. But last year they only admitted 3500 new students, and 350,000 applied! What are the unlucky 346,500 students going to do?

2004-'05 -----------------------15,000

2005-’06------------------------16,227

2006-’07------------------------20,000

2007-’08------------------------23,500

2008-’09------------------------27,000

2009-’10------------------------32,000

Number of students gone to USA

China-----------------67,723

South Korea -------62,392

Japan ----------------35,282

Taiwan ----------------20,094

business and management

(22%),

engineering (19%)

mathematics and computer science (9%)

physical and life sciences (9%))

social sciences (9%)

fine & applied arts (5%),

health professions (5%)

intensive English language (5%)

Agriculture(2%)

humanities (2%)

Top 10 Fields of Study

Indians

34% of Microsoft

employees

38% of doctors in

USA

12% scientists in

USA36% of NASA

scientists

28% of IBM employees

17% of INTEL

scientists

13% of XEROX

employees

Country: IndiaCapital : New DelhiLargest City: MumbaiOfficial Language: Hindi, EnglishPresident: Pratibha PatilPrime Minister: Manmohan SinghArea: 3,287,263 sq. kmPopulation: 1,210,193,422Density: 366.7/sq.kmGDP: Total: $4.469TrilliionPer Capita: $3,703HDI: 0.547Currency: Indian Rupee Calling code: 91

Jai Hind

Thank You !

$ rate effect on indiaMonetatry policy Recession Euro crisis effect on indiaDeflation Reflation FDI ad and disad.